Friday, March 22, 2013

Sale means cash for state and better power for people

Privatisation has never been popular electorally.

There is a range of reasons for this.

Many people believe a business that is under political control can be forced to provide services below cost, some feel a sense of satisfaction in shared ownership, and others consider private ownership may unduly cut costs.

In a recent survey published by Essential Media, 58 per cent of Australians disapproved of privatisation.

While ALP and Greens voters were more opposed than average, this view was also shared by 54 per cent of Liberal or National voters.

The survey indicated that Queenslanders were even more antagonistic to privatisation than others.

Similar views are seen in opinion polls across the world.

But, although such polls intimidate governments, there is no case of privatisation policy contributing significantly to an election loss and no case where privatisation has been reversed when a government lost office.

Across all countries — even communist ones such as China — governments have divested businesses they once owned.

In some cases, as with Labor's privatisation of the Commonwealth Bank in 1991, government ownership is recognised as serving no purpose and, instead, hamstringing management.

With the Commonwealth Bank, the Hawke-Keating government needed the money.

Queensland is relatively more debt-ridden after years of unrestrained government spending, a situation similar to Victoria in the 1990s.

Electricity accounted for the bulk of this, though it also included gas, ports, trains and forests.

But in all cases, government- sponsored privatisations also recognise the greater efficiency of shareholder-owned businesses.

Government ownership brings with it poor value due to unprofitably low prices to certain customers and featherbedding with unproductive jobs.

Unions support such over-employment in heavily unionised workforces and the Electrical Trade Union has been a major campaigner against privatisation in Queensland, as it was in the southern states.

Queensland's electricity transmission and distribution providers — which own the ''poles and wires'' that deliver the product to homes, shops and factories — are among the few Australian commercial activities remaining in government hands.

A number of reviews all point to Queensland's existing monopoly businesses — Powerlink, Energex and Ergon — incurring higher costs than their counterparts in other states, especially the privatised businesses in Victoria and South Australia.

The Productivity Commission is due to issue a final report on electricity networks next month.

Its draft report estimated the government-owned networks are 80 per cent more costly in terms of dollars per kilometre of line.

The Energy Supply Association of Australia puts the networks in Victoria and South Australia well ahead of Queensland in terms of system reliability.

Examining the Queensland network businesses against suppliers in southern states, the Australian Energy Regulator points out that the Queensland operations seem to require more capital than should be necessary and persistently exceed the spending limits set for them.

Queensland consumers and businesses pay the cost of these deficiencies in higher electricity prices.

But privatisation will also allow a paying down of the debt accumulated through the excessive spending of the Beattie and Bligh Labor governments.

The audit conducted by Peter Costello estimates the sale of the electricity networks would bring in $25-30 billion.

This would eclipse the $806 million the State Government got for selling half its stake in rail transporter Aurizon Holdings and be sufficient to clear enough of the state's debt to restore a AAA credit rating and bring lower borrowing costs, as well as reducing pressures on state taxes.

Premier Campbell Newman considers he has a commitment not to privatise the electricity assets until after another election.

But every delay in this inevitable measure costs the taxpayer and postpones the improved supply that would be delivered to customers.

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RICHARD J WOOD

Today, those who subscribe to the principles of individual liberty, limited government, the free market, and the rule of law call themselves by a variety of terms, including conservative, libertarian, classical liberal, and liberal.

I see problems with all of those terms.

"Conservative" smacks of an unwillingness to change, of a desire to preserve the status quo.

Only in Australia do people seem to refer to free-market capitalism — the most progressive, dynamic, and ever-changing system the world has ever known — as conservative.

Additionally, many contemporary Australian conservatives favour state intervention in some areas, most notably in trade and into our private lives.

"Classical liberal" is a bit closer to the mark, but the word "classical" connotes a backward-looking philosophy.

Finally, "liberal" may well be the perfect word in most of the world — the liberals in societies from China to Iran to South Africa to Argentina are supporters of human rights and free markets — but its meaning has clearly been corrupted by contemporary Australian liberals.

The philosophy that animates my work has increasingly come to be called "libertarianism" or "market liberalism."

It combines an appreciation for entrepreneurship, the market process, and lower taxes with strict respect for civil liberties and scepticism about the benefits of both the welfare state and foreign military adventurism.

The market-liberal vision brings the wisdom of the Australian Founders to bear on the problems of today.

As did the Founders, it looks to the future with optimism and excitement, eager to discover what great things women and men will do in the coming century.

Market liberals appreciate the complexity of a great society, they recognise that socialism and government planning are just too clumsy for the modern world.

It is — or used to be — the conventional wisdom that a more complex society needs more government, but the truth is just the opposite.

The simpler the society, the less damage government planning does.

Planning is cumbersome in an agricultural society, costly in an industrial economy, and impossible in the information age.

Today collectivism and planning are outmoded and backward, a drag on social progress.

Market liberals have a cosmopolitan, inclusive vision for society.

We reject the bashing of gays, Japan, rich people, and immigrants that contemporary liberals and conservatives seem to think addresses society's problems.

We applaud the liberation of blacks and women from the statist restrictions that for so long kept them out of the economic mainstream.

Our greatest challenge today is to extend the promise of political freedom and economic opportunity to those who are still denied it, in our own country and around the world.